NTWK - Earnings call transcript Q2 2025 | NetSol Technologies, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning. Welcome to NETSOL Technologies Fiscal Second Quarter 2025 Earnings Conference Call.

On the call today are Najeeb Ghauri, Co-Founder, Chief Executive Officer and Chairman; Roger Almond, Chief Financial Officer; and Eric Wagner, Chief Marketing Officer.

I would now like to turn the call over to Patti McGlasson, General Counsel, who will provide the necessary cautions regarding the forward-looking statements made by the management during this call. Please proceed.

Patti McGlasson

thank joining and everyone, morning, you us. for Good

the company's and call safe Reform the during financial our cautions questions. review information we this the highlights on the of regarding necessary that the Securities the Private Act. Following call. results, Please by all under business will of today's now Litigation call provide harbor statements covered note provisions forward-looking made I'll the management for discussed open is

forward-looking include aspects are may or reports on report discussion filings, reflecting future, management's our contained certain company's and The forward-looking XX-K could qualified Form stated of forecast statements cautionary SEC statements including from in of and our statements Form current the implied. on quarterly XX-Q. These those company's NETSOL's annual the by and differ press actual results materially release

also I financial GAAP certain press measures. The like out be reconciliation measures. will these point earlier a discussing would most that comparable non-GAAP that contains are of issued to release we today results non-GAAP

Finally, remind available this recorded be in will via for everyone press www.netsoltech.com made to available today's release. I call and replay link that at would like and

the turn to to like over I'd Now Najeeb? Najeeb. call

Najeeb Ghauri

be good Today, morning, you, office. Thank and Patti, from I'm dialing happy Lahore, everyone. to in NETSOL Pakistan's

position And sustained to our shareholders. This quarter, AI and invested on revenues. progress, value two, our growth recurring particularly for significant two primarily in we fronts. we we considerable customers strategically made as our One, we drive our in drove business, us in long-term

and evolution XXXX recurring a in predictability the our when with percentage is in should of for demonstrates driven revenue growth business continued the our our second long-term a The drive services to growth line that, enhanced model strategy in revenues profitability time, business. and it over XXXX. in fiscal by revenue increase We quarter XX% second double-digit revenues, the quarter net of achieved of increase fiscal total in compared recurring primarily

drive diverse they our in marketing growth investing believe a the profitability, to investments on opportunities position multiple our recognized line shift, To better strategy. quarter, in expenses with increased capitalize these and this while long-term we opportunities in we across impact that short-term in markets had have our of us Accordingly, we on the are us. are front sales many

Specifically, AI, or our be important for key focus future artificial an growth. intelligence, and continues initiative to strategic a

encouraging elaborate Eric which We advancing period, Officer, our both initiatives second Marketing my our have progress AI on in will the quarter and Chief remarks. after made prepared year-to-end

are institutions from strong providers receiving share leading APAC leading where and interest Europe, market name. we region, have equipment Lastly, are respected our we considerable both a a markets well-known in and is automakers, financial existing through NETSOL our where

a in customer and we superior like Agreements the other our platform demonstrate their automotive provider of Transcend addition the of competitive the between with a support to this products company NETSOL in leading XXXX. to ] depth Australia, agreement these ], multimillion with China, close [ dates During dollar Group long-standing in the financing the equipment back BMW highly announced automotive an announced customer that the and expanding parts. finance operations of also and and U.S. operations and customer a quarter, Japanese their After leading a of market. on in [ quarter, Zealand New agreement we existing to NETSOL the a we validation provide are for in a in -- with go-live long-standing finance Kubota relationship that relationships service

Demand of strong Transcend our the in U.S. is as well.

a seamlessly of processes used digital integrates is entire quick mentioned for Anywhere brand by customers. to an purchasing omnichannel into our and platform I calls, customers' on efficient being U.S.A., Retail, MINI facilitate purchasing Transcend independent fully As previous manage have to journey that our BMW journey Group,

In integrating the that addition, dealerships new process Retail we you also are network. customers, excited with share in MINI of MINI USA the more Anywhere expanding to Transcend beyond into U.S.A., to BMW with I'm U.S.A. and

a half I'm view the our made by have am long-term in progress I fiscal the to I'm pleased with -- in this encouraging business, we come what's of Taking XXXX. encouraged quarter. of later

profitability are and coupled mix value revenue recurring and are shift support for our making shareholders. creation into that confident business, more revenues We revenue our the will this investment subscription include -- in we to with translate in enhanced sustained

financial dive go to ahead, for I'd Officer, Wagner, the AI quarter, Eric please. call our a to to we Before Chief our our go deeper into over take over Marketing results like turn Eric, the initiatives.

Unknown Executive

Technologies Thanks, our are everyone. our you with with continues industry good to innovations integrating way across and today we excited morning, own Najeeb, business NETSOL how the pave AI transformation. share our how and in I'm and products, efficiency, to our in intelligence to drive services AI operations

in began doing building began our strategic in we Transcend In NETSOL when major organization. internal we've is focused several XXXX Labs capabilities. AI Our AI launched believe made that step took investments we an so, journey innovation AI X on AI Labs, we artificial AI-first we In areas. XXXX, this when initiative intelligence dedicated position with Transcend core [indiscernible]. forward a our as

heavily transformation this understanding our forefront to We've of to internal how AI First, of team capacity make and and technology. this our educate outcomes. building we're curriculums of that to technology achieve evolving our remains enhance rapidly building invested apply to in at skills staff the formative comprehensive demonstrate out better the sure and

additional to suite. functional present, we're offerings, Second, our we're major our and AI we're expertise entire product AI leveraging upgrades Transcend products. to Retail our across exploring Finance enhance enhancements and our Transcend At adding

expert data help are services. consulting their across enhancing Consultancy's and services better solutions providing areas information guidance we AI AI cloud achieve we're Transcend to third, to offer specialized And and security, goals. In short, businesses critical like engineering

product ecosystem our that Taking unified the of revolutionizes fall AI-driven the things financed sold, a step are further. launched Transcend how we assets In and leased. XXXX, platform,

and out key advancements two AI rolling impact we I major immediately. several highlight to that want quarter, enhancements have an will This are

multi-document credit minimize history more extracted risk processing, invoice and accelerate risk contract reducing factors, The handling improving with analytics or validation IDP assessments, document technology. advanced meets contracts ] OCR data intelligent automated solution cash internal and ensures and and only also first fake [ data delivering and standards, NLP With credit underwriting a decision-making. can cards AI-powered verification, in experience. records, extraction transforms efficient reduces statements, This optimize compliance flows, businesses approvals ID and not errors SaaS to financial but Automated manual financing integrates regulatory faster, enhancement classification, is processing intervention, IDP. operational risk. real-time

AI This throughout support customers, finance efficiency, guidance responsive asset our experience. operational cycle, is Second, to increase interactive which instant interactions, assistant, more create intelligent recommendations. intuitive life and internal we with real-time provides improve customer and designed enhancement process have teams a responses, the both assisting and

a efficiency, our AI tool. a part improving strategy. It's and integrating not customer is experiences our At just By business. the NETSOL, future-proofing we're across core AI of platform, enhancing Transcend

As we unlocking look to expanding sharing we Transcend's new and is for continue more forward NETSOL. capabilities, AI opportunities about driving growth how transformation

the second of Roger NETSOL our I remarks. concludes my Almond, quarter now go fiscal That turn Chief to over Officer call to results. Financial over XXXX will Roger?

Roger Almond

Eric. Thanks,

year recurring revenues support of License XXXX revenue prior any million. with periods. increase over subscription a and the this of which were part million, a second million onetime million recurring were our reporting our the year normal were revenues These $XX,XXX the fiscal and in Absent up, catch-ups onetime fiscal our net fees quarter would prior in million, more in the for during catch accurately with an $XX.X $X with been segment. Recurring the in catch-up quarter the of XXXX $X.X revenues quarter compared XXXX for increases quarter approximately million representing the period, approximately compared $XX.X of of are second contract this compared was have period. quarter total Included the onetime period. value XX%. reflects this in of occurred increase a prior for the period, or in XX% business operations revenues second Our for million, or our $X.X fiscal year $X.X $X year prior

prepared will more revenues and the his generate recurring driving in predictable sustainable remarks, are we in that time by growth stated profitability. our term that long results in this Najeeb reliable business over benefit As confident

million Total $X.X year prior second the or or services $X.X XX% of increase. XXXX. compared was in revenue revenues, for $X.X the profit second period, second quarter the a XX% in quarter Gross period. of $X.X $X.X million, fiscal XXXX for million revenues compared with or to prior was net million, in year second of quarter with fiscal the net XX% XXXX million the were of XXXX, million the quarter fiscal of compared cost $X.X revenues of fiscal for year Total

$X.X of of sales same XXXX sales to in million, operations the fiscal million expenses of XX% in XXXX. or second of Loss second fiscal was the XX% for were year. fiscal $X of income Operating million, second period compared quarter of $XXX,XXX, for from last from operations compared to quarter or XXXX the $X.X the quarter

currency conducted U.S. with also Turning net $X.XX million, it denominated of to revenues, per loss XXXX second loss the our expenses an totaled increasing currency operate dollar. in in other generally the also foreign income denominated a a Included is expenses transactions our share rates portion currency GAAP rates, we $XXX,XXX, increases than significant compared Because Likewise, in was of A revenues, the GAAP exchange quarter in a $X.XX fiscal currencies dollar. attributable $XXX,XXX, in diluted foreign or net U.S. to compared value GAAP a to $X.X gains other the geographical reduce of U.S. approximately our period. as regions, decrease XXXX. the exchange NETSOL on the loss our of per in currencies the foreign in net a than several share, loss reduces but $XX,XXX of of profitability to of dollar. prior effect business quarter our diluted metrics. it of U.S. in has exchange strength to other second currencies of fiscal the in than it our our the dollar relative dollar with but U.S. compared tends loss the or for quarter year

quarters diluted of year the a non-GAAP or a share, adjusted per diluted per our $XXX,XXX, EBITDA metrics. $XXX,XXX, with of calculations Non-GAAP in $X.XX for share second ended EBITDA contained December schedules was to EBITDA prior fiscal our per $XXX,XXX, the of diluted or in diluted compared Moving or loss non-GAAP for of year. revised was our in the quarter or and the the the release of the XXXX, earnings $X.XX $X.X with second adjusted $X.XX reconciliation Non-GAAP second adjusted share quarter XX, XXXX. non-GAAP EBITDA previous of quarter of per fiscal XXXX period. share, see million, $X.XX compared fiscal XXXX EBITDA Please loss of the for loss for

to totaled balance $XX.X our XXXX. December of million, December compared share. Working million sheet. XX, $XX Total and XX, to with XXXX, approximately cash We XX, stockholders' our Turning cash or million at December to as equity XX, at increased per million $XX.X XXXX, at XXXX, June XXXX. June $X.XX XX, equivalents $XX.X million at capital $XX.X NETSOL compared was

strong and as reinforcing substantial strategy shareholders' business Our sheet our balance execute growth. provides we cash for our future equity,

Pakistan, NETSOL would through XX%. XXXX. approximately XX repurchased, approximately January million $X.X NETSOL time Technologies our in repurchased of NETSOL XX approximately has on all Pakistan this million. the Also the million approved at shares a Pakistan are increase XXXX, shares ownership of At If of this X.X NETSOL call, buyback shares subsidiary, by million XX, June value XX,

remarks. the now prepared turn my to I'll Najeeb. call back concludes That over

Najeeb Ghauri

Eric. and Roger you, Thank

I'm progress said made before, the I with that in second pleased As the very quarter. we

products and markets. at in many hard are We seeing our encouraged in and and by opportunities we investing that work are we are innovating the services, the

taking are long-term 'XX growth strategy we positioning a business in of NETSOL XXXX, beyond. we are to we and for approach and believe our the goals, always, As half solid fiscal and that latter

open now questions. for Operator? With that, the to like I'd call

Operator

Management. Wealth first [Operator of question Stonex Felte line Instructions] from the Todd The comes with

Todd Felte

Can geography Do have Asia? of America, as North a breakdown of the Europe, far as quick your you give available? revenues that you

Najeeb Ghauri

I think that. to do go Roger ahead. able Roger, should be

Roger Almond

Yes.

probably Europe out had coming about had quarter, of here BMW the out in So XX%, we a it percentage market quarter, is we and little XX% region, the coming from this the -- APAC coming depends each market. on with bit usually we quarter. But the higher where Americas. U.S., actually of and XX.X% this In out percentage higher U.S. of to the XX of reduced a percentage due had the APAC which

Todd Felte

do pick where And that. market? you future, appreciate expect if I your could a from of Okay. come the growth you in kind to

Najeeb Ghauri

Yes.

for asking Todd, thank think this question. you I

things America, and been especially. are new of doing hiring lot the very lot There's in new a some of office. We've a going We in really Austin committed on. efforts North talents

to So China region is and America North solid, pretty percentage are growth you be I believe performing in markets as going wise, heard other Europe. better about while

So we'll steady, better but we we forward. they're that in going are that North pretty believe lot do a hoping America

Todd Felte

great to hear. That's Okay.

billion a of You ago, Yamaha North new impressive last just X looking list BMW, originated these and at revenue, billion reported client year. pretty AutoNation, in $X.X they some large MINI Cooper, over AutoNation America, of loans have $XX I'm days over companies. in

if I I is $XX in is Can details a it you straight dollars maybe flat just just contract? receiving subscription was mean, to millions give mean, to you grow us paying. your subscription with them? revenue, contract of it them? a from would Or billion software be some they're AutoNation fee about

Najeeb Ghauri

actually sizable of contract X, I think signed income integration XX going the in about the since is Well, on. we now have generated it stage we ago. [indiscernible] And this months

think I we number, million, think total I the number, look Roger. if something I at remember $XX that, the by like you if overall, reported

we But retail healthy in pretty U.S. our interest -- BMW this importantly, is in because Todd, digital deal, more of this market very have good pipeline especially. from the

year. BMW seen So risen we've we has contract interest announced since the last

opened the So the still think business we had cases. company U.S. I share just more first contract doors. means a in there's companies that can't time. AutoNation U.S. this similar And it for largest the promising, more created we're this in other in it's negotiations the name where I in But more in that or some because achievement very the space in But opportunities.

add in about Eric, excited you side expert opportunity are retail pretty the because the you digital ahead, the U.S. Eric. may in in this And retail we're to So Go pretty -- want area.

Unknown Executive

as I think definitely think very that seeing on seeing excellent very on just some pipeline agreed mean, -- that The growth on a front. is Transcend the we're I Yes, activity within RFP the encouraging front. I that note, And we're some Retail. strong.

past we've RFPs the X think than to we've invited been to more before. been I over months ever a year

So definitely growth some strong potential.

Todd Felte

new Okay. customers? value you going able That's these What investments pricing revenue think you? to to about, recurring this see prices AI growth very and all The With is raise you into features, the nice new power kind bring also be great. to that. and your coming of more are have? in revenue your you to to do And do can

Najeeb Ghauri

the want who in Well, Todd. long In us. make are what renewal. cases that what is we'll China, can two we it's exactly things a team are our just sure and comment where making happening large customers talk for for a about get vaild Good -- matter a that we that obviously sensitive example, possibility to you're we customer cases, do our saying. working because very It's are with some sure that I term also

premium the us maintain customers. relationship grow prices, and other But strong for to is blue-chip that. cases, various are more these revenue to on name, customer possibility. also from always working periodically. ways it's I And many think discussed we our some in find And within Very are

you're saying, team exactly what is in some Our cases. doing

Todd Felte

recent of NETSOL and you that Pakistan. U.S.-based there a the hiring question cheaper ownership, just XX% think, your of much Or in be there your have you talented lot engineers is engineers. to was of a a increase is long-term that has I can any Okay. in to you with buybacks, there? With NETSOL to I ownership subsidiary last than your do My the Or -- share about entity? going know with be XXs there all Pakistan? separate are continue plans Is goal be may now. acquiring

Najeeb Ghauri

the ], will is take right more think a up buyback buyback. ownership in will buyback now [ complete once a There we this is to more us whole That really which end to with really PK, we months probably XX% the XX% XX% to close owns I [indiscernible] this ago. idea we started jump. few Pakistan

We have doing the that's ownership we mind in the ]. -- to [ can one try goal buyback or by that best maximize only

think really sheet and and so balance the is forth. the So goal I financial company's strengthen parent to

PKR at because good So NETSOL and PKR peak, now about Pakistan it's a opportunity stock XXX, the it's was at I believe. XXX,

a we it's good and this a So buy continue ago. we time couple of that months plan implemented

Operator

session. this At question-and-answer our time, Instructions] [Operator this concludes

during or the please the over them closing for like was at If turn now would remarks. call not Mr. Ghauri addressed Relations netsol@imsinvestorrelations.com, to (XXX) by at session, contact your calling to team them XXX-XXXX. NETSOL's e-mailing Q&A by question back I Investor

Najeeb Ghauri

you us look Thank day. and today. on to call. good Thank We our forward for you a next joining have updating you,

Operator

Earnings NETSOL's Thank for today Fiscal you Third joining Call. Quarter us for XXXX

You may now disconnect.

NetSol (NTWK) 13 Feb 252025 Q2 Earnings call transcript